Unemployment,at the aggregate level
A) is zero in a perfect world.
B) is a sign of market failures.
C) is avoidable.
D) can be prevented with sound government policy.
E) is important for a well functioning economy.

Question

Quizplus · Accepted Answer

Unemployment is important for a well-functioning economy because it indicates that resources (labor) are available for new opportunities and growth. In fact, having some level of unemployment is considered normal in a market economy because it allows for companies to expand and innovate by hiring new workers. However, high levels of unemployment can lead to negative economic consequences, such as decreased consumer spending and increased social welfare costs. While sound government policy can help alleviate unemployment, it cannot completely prevent it as there will always be natural fluctuations in the job market.

Unemployment,at the Aggregate Level